Chapter 1

INTRODUCTION
The chapter deals with a basic introduction about management education system in
India and worldwide. It also gives a brief scenario of the recent trends in the
management education in India. The chapter also mentions the changes that have
taken place over a period of time in management education system.
In the modern economic scenario all over the world- Management as a stream of
education and training has acquired new dimensions. Management is an exciting field
where you can have an immediate impact on the operations of any business. The field
of Management is dynamic in nature. New tools and techniques are continually being
introduced to improve the efficiency, productivity, and profitability of any
organization. All organizations and their departments, functions, or groups use
Management methodologies, which include problem solving techniques and
guidelines for various related activities.
1.1 Management Education: The Global Scenario
Global competition is changing the relationship between management education and
business. The efforts for building leadership pipelines in organizations have
intensified in the last five to six years (Conger & Fulmer 2002). Continuous changes
in both technology and economic systems, along with the speed of change, require
executives to be engaged in a constant learning process. Management education has
become a major profession that attracts considerable attention across the world.
Evidence of this is the inception of a new journal: Academy of Management
Learning and Education by Academy of Management in 2002. Though the market
has been growing, there have been attempts to assess the adequacy of efforts at
various points of time. This part is divided into three sections:
1) Market for management education;
2) Some introspective attempts reported so far;
3) Directions in which it is moving.

1.1.1

Market For Management Education

There is little doubt that business education is big business across the world. It is
estimated that the global corporate education and training market is around US$65
billion. The global management education market is estimated to be US $22 billion
(Friga, Bettis and Sullivan 2003). It is growing at about 10-12 percent per annum. US
is the largest market. About 900 American Universities offered masters in business
(Pfeffer and Long 2002). Since the market is lucrative and entry costs are relatively
low, there is continuous growth and new entry. As competition is increasing the
reputed schools are globalizing and branding their products. This is likely to see a
reputation and brand driven growth. Although the general value chain of business
schools has remained relatively unchanged over the past 50 years, business schools
have created some unique characteristics in their value chain that have molded their
strategies over time. The sources of value creation are branding and niche creation. At
the same time corporations are intensifying their efforts for management
development. The number of corporate universities is on the increase.
1.1.2

Earlier Introspective Attempts On Management Education

The first management education program started at MIT in 1931. The second was at
Harvard, dating back to 1943. The first review of business education that has been
reported in the public domain was from University of Pennsylvania in 1931
(McFarland 1960). This report stated that schools of business should establish a
genuine discipline to be credible. Carnegie Foundation brought out a report on
management education in 1959 (Pierson 1959). This report stated that schools of
business have changed very little since the 1931 report of Bossard and Dewhurst.
They have failed to identify and establish a genuine discipline characterized by its
own body of subject matter, its own theoretical problems, its own research and its
own methodologies (Pierson 1959). It raised key questions concerning the role of the
management department among the traditional groupings in schools of business. As a
way out, it suggested that sub-disciplines should grow, leading to specialization.
Management faculties should not cling too closely to the historical traditions of the

scientific management movement. A three point agenda for improving management

education was proposed by McFarland (1960), and is given as follows:
Management departments and their faculties must redefine their own academic
image.
After formulating their most important objectives, management departments
must cast off the shackles of an undistinguished past.
Management departments must increasingly orient themselves toward
genuinely scientific research, unlike in the past.
It goes on to state that, more than anything else; management departments need a
solid research orientation. Subsequent to this debate, there was another attempt to
review management education (Powell 1963). These debates induced many to study
the impact of management education. An MIT study showed that significant attitude
changes had taken place in students after management education. Another major
study, on the impact of management education, attempted to move one step closer to
empirical validation of management education. It concluded that self development
was dependent on individuality rather than on specialized formal education. It came to
the conclusion that a college degree is a self validating criterion for success (Luthans,
Walker and Hodgetts 1969).
The major consequence of these series of debates was that the professional accrediting
association for business and management education, the American Assembly of
Collegiate Schools of Business looked into the concerns. Not surprisingly
management education showed continuous improvement and grew rapidly.
Japanese domination in the global economy led much heart searching as to the
relevance of current management education. In the light of the erosion of American
business dominance, the quality of management education came under the
microscope. In the 1980s, American higher education of business has been accused of
training highly specialized managers with short term technical and monetary goal
orientations for the nations traditional organizations. American Managers were seen
as ill-equipped to develop appropriate policies and creative consensus-based
organizations necessary to actualize the full potential of their employees. There was a
proliferation of low quality Master of Business Administration Programmes. This
3

triggered a second wave of introspection on management education (Rehder 1982).

Four major weaknesses that the Carnegie Foundation Study of 1959 reported continue
to operate as a drag on management education. These are essentially related to
financial and academic dimensions:
A central cause of poor academic standards was that there were far too many
faculty members who were not academically qualified, and there was an
inappropriate number of part-time faculties.
Business education lacked a clear sense of mission and goals.
A disproportionate number of business administration students had modest or
poor admission records.
The academic standards of business administration schools were generally low.
Another set of studies appeared from 1982 onwards, highlighted the imbalance
between a specialized education and a liberal education which was a handicap for the
development of a large and significant segment of the nations business talent. It
appeared that the forces perpetuating this imbalance towards highly specialized and
applied business education were formidable and resistant to change (Rehder 1982).
The roadmap that emerged for improving the quality of management education
suggested that an ongoing dialogue between university educators and leading
managers from all sectors concerning the contemporary and future needs of American
managers would provide a necessary first step to overcome both the attitudinal and
institutional inertia that perpetuates the technical specialization imbalance and other
educational problems previously addressed. It suggested that it would be highly
productive to combine the talents and considerable resources of a select group of
America's business, government and educational states of people who were well
aware of the need for change in management education, in an ongoing series of
symposia that addressed the above and other related problems. Rehder (1982) also
predicted that, if business schools fail to adapt, their functions would be increasingly
carried out by Corporations. A number of corporate universities have subsequently
come up.

In the same year a joint effort by AACSB and EFMD appeared (Dymsza 1982),
known as: Managers for the XXI Century. This study represented the first
comprehensive initiative to make management education more relevant for the future
since Carnegie Corporation and Ford Foundation established standards for
professional management education in schools of business in 1959. The major
recommendations of the joint AACSB and EFMD study were:
Management Schools should provide an education that combines both
generalist and specialist components.
Management Education should be much more holistic in character. It needs to
be more integrated incorporating a number of functional, quantitative, nonquantitative and analytical fields including the humanities and sciences to
educate the whole manager to meet the responsibilities and challenges of the
future.
Management schools, thus, should aim to develop future managers with a
portfolio of capabilities quantitative, computer and other analytical skills,
functional knowledge and communications, interpersonal, bargaining,
negotiation, entrepreneurship, administration and other non-cognitive skills.
Management education involves a lifetime process a continuum of
learning with self teaching and initiative beyond the business school, work
experience, on-the-job training, and management at the corporate level and
possibly refurbishment of management knowledge at business schools at least
once during a career.
Management schools should teach more effective environmental scanning and
analysis which is particularly important for domestic and international
business
A closer partnership should be developed between educators and managers in
the future.
Management schools should strive to develop experiential courses in creativity
and managerial innovation.
As knowledge and action are inseparable, we have to educate wisely and well those
who will manage critical institutions of our world (Dymsza 1982). Two studies
(Wexley and Baldwin 1986, Keys and Wolfe 1988) appeared on management
5

education that emphasized the need for a comprehensive approach to management

development such as:
Enhanced institutional accountability for quality;
Increased use of experiential techniques;
Intensive use of educational technology; and
A recognition of the need for lifelong learning.
The next major efforts for improving management education originated from UK: the
Handy Report and Constable and McCormick Report.
Both these were based on extensive baseline surveys. These identified that providing
staff of sufficiently high quality to support a significant expansion of management
development activities is a major difficulty across all supply sectors. Implementing
appropriate measures to overcome this problem is one of the most critical factors in
improving both the quantity and quality of future supply of executives (Osbaldeston
and Barham 1989). As the lead time involved in recruiting and training new staff is
long, this issue must be tackled with the greatest urgency. These reports emphasized
that training is a strategic weapon, while learning needs to be linked to organizational
and individual goals. The second report brought out by the Ashridge Group
considered the issue of Management for the Future (Storey and Sisson 1990), and
emphasized three aspects:
Organizations should promote learning as a cherished organizational value and
must seek to link training and development to business strategy and plans.
If the business schools and other providers of management education are to
help their clients develop learning cultures, they will need to develop new
skills and services that will enable them to contribute more effectively to
clients real business needs.
The business schools will need a much deeper understanding of the business
needs of companies and will have to build closer relationships with them
through partnerships and joint ventures.
Because of the continuous dialogue between corporations and business schools there
was a convergence of approach between that of AACSB and practitioners. The
6

competency based movement, begun in corporate and professional training

organizations was followed closely by the AACSB outcome measurement project.
This convergence of approach of practitioners and academicians resulted in focused
management development efforts. This led to combining knowledge and
conceptualization, skills development and assessment processes. A concurrent UKbased initiative the Management Charter Initiative was started in 1989 (Frank
1991). This was initiated mainly due to the poor performance of the British Economy
compared to that of its competitors. There was a broad consensus on the linkages
between management talent and competitiveness of various economic sectors. The
Charter defined that making of managers needs attention across five fronts:
Company specific work on competencies;
Target setting;
Evaluation of performance and analysis of developmental needs;
Formal training and developmental interventions; and
Support for self-development.
An assessment after three years indicated that the Management Charter Initiative led
to comprehensive changes in management education.
The debate on the role of MBA restarted in US in 1990. It was argued that the
traditional instructional process was deficient in many elements. One of the problems
that was identified was many educators suffer from the misguided belief that they
routinely emphasize critical thinking in their instructional tasks. A series of criticisms
about the operation of business schools that appeared in 1992 and 1993 (Hasan 1993,
Raelin 1993), reported that business schools chose increasingly to teach what they
wish to, rather than what business organizations need. It was decried that 20 to 25
years of academic business school research had yielded little or no fundamental
knowledge relevant for the management of contemporary or future business
organizations. These criticisms led to a series of changes. AACSB adopted new
accreditation standards for both business and accounting programms (Hasan 1993).
As instructors and mentors for business and management, the schools had the
opportunity to develop and demonstrate new ways of working with their clients (Wild
1995).
7

The global challenges exerted pressure on management schools to change. Growing

globalization of national economies through trade and investment made it even more
vital

to

further

the

understanding

of

processes

and

consequences

of

internationalization. It was certain that institutions lacking a vigorous, systematic and

coherent strategy for internationalization of existing management curricula, putting all
concerned at a serious disadvantage in the years to come. Global companies
increasingly recognize the need to develop leaders who are equally comfortable and
effective working anywhere in the world (Miller 1998). Howe and Martin (1998)
indicated that best practices cannot be easily transferred across the globe. One of the
major problems they identified was to find an internationalization strategy that
accommodates the interests of Western business schools as well as those of the host
countries. It was becoming clear that as one of the most market oriented sectors,
business schools have the opportunity to participate in the transformation of higher
education. Business schools started becoming initiators of change.
Management education and management practices are converging (Martin and Butler
2000). Reputed schools have created value through research, cases and action
research. Internationalization of business called for a series of new skills. It was clear
that Management development needed to create a portfolio of learning through the use
of a variety of approaches. Till recently, there have been no major discussions on
funding support for management education. A UK study reported that when
universities depend on tax payers, their independence and standards suffer. As per
this, American Universities with their mighty reserves of talent and money, look
comfortably placed to compete with the new academic powerhouses emerging in
India and China (Stevens 2004).
One of the major elements that helped the professionalization of management
education in US and UK has been the accreditation process. In response to criticisms
leveled at collegiate business education and programmatic accreditation, and the
threat of competition from the ACBSP, AACSB introduced revised business
accreditation standards in 1991. AACSB linked the new accreditation evaluation
process for a school to its mission statement (Henninger 1998). The general consensus
was that the new standards would increase the number of accredited schools by
making it easier for business schools to achieve accreditation. The standards required
8

all programs of a particular level to demonstrate comparable minimum levels of

excellence in teaching, research and service. Though accreditation as a process was
well received, AACSB faced a potential dilemma. If it continued its pace of
accrediting MBA programs, within 10 years two out of three programs would be
accredited. It has been shown that Doctoral granting institutions with students
primarily in masters programs comprise a dwindling percentage of those accredited,
with the public typically judging the quality of these top tier schools by their
admission selectivity, grants availability and faculty research (Jantzen 2000). The new
process was also criticized by many. Under the new AACSB standards, business
schools may designate teaching as their primary mission, making teaching
effectiveness rather than research productivity as their goal (Yunker 2000). Some of
the learning that we can have of the existing mission linked standards accreditation
process are:
It is considerably more difficult to assess teaching effectiveness than it is to
assess research productivity, since career success of graduates is virtually
impossible to measure accurately.
Business School faculties preparing for accreditation or reaccreditation thus
are forced to emphasize superficial and unrealistic indicators such as the
number of course changes approved by curriculum committees.
The AACSB should devise a set of reasonable accreditation standards with
numerical guidelines established for measurable variables, and issue
certificates of distinction to a minority of business schools that maintain very
high levels of faculty research productivity.
Accreditation has enhanced the variety as well as standards. Re-accreditation
processes make sure that the business schools are dynamic. The main learning from
the accreditation process is that linking mission of the business schools with
performance has been a good practice. Various levels of programs should use
different yardsticks such as: teaching effectiveness, research productivity, client
relationship and novelty of programs.
Quite apart from the basic accreditation there could be one, two or more levels of
superior performance. Accreditation has made business schools measure learning
skills and this had led to continuous improvement. Research productivity has to be an
9

essential element of accreditation as it will induce faculty to learn and evolve. One of
the criticisms of accreditation process is that schools with client relationship and
otherwise are not differentiated. It became evident that broad-basing accreditation,
and creating levels within, may be the best mechanism for continuous improvement.
1.1.3 Trends In Management Education
After the media first introduced ranking system for business schools in 1988, business
schools appeared more proactive in making changes, although they focused primarily
on product tinkering, packaging and marketing. Subsequent to this, the popularity of
MBAs rose. Global competition, emergence of consulting business and Internet based
transactions are changing the product offerings in management education. The trends
of evolution of management education indicate that knowledge creation is becoming
more student based (Friga, Bettis and Sullivan, 2003). This will usher in a variety of
changes, including, paradoxically, a trend towards closer interaction among industry,
students and faculty. E-learning and computer based learning packages are making
inroads slowly. A recent study has concluded that although the creation of knowledge
will always be an important mission for business schools, other organizations are
developing more formal management programs and creating knowledge; this may
cause a shift in strategy as schools become more focused on gathering and sharing,
rather than on creating knowledge. It is important to recognize that knowledge
creation is taking place not only in ivory towers, but also in corporate boardrooms.
Computer based tools and technologies are being used for themes where content is
crucial. On the other hand, themes that is rich in tacit knowledge such as leadership,
entrepreneurship and multicultural sensitivity experiential contexts are being
generated for bringing teaching closer to real life. Thus, business schools are focusing
more on gathering and sharing new knowledge. Many niche organizations and global
consulting firms are increasingly becoming the source of management knowledge
creation. It is clear that management education will emerge as one of the main foci of
higher learning, as service economy takes precedence over other segments. Three
roles are getting differentiated, viz., management knowledge creation, knowledge
gathering and knowledge sharing. This will change the face of management education
further. A recent study on management education has shown that there will be a
fundamental shift in business school product offerings away from traditional MBA
10

programs to more part-time programs and education within corporations and in

peoples homes [Friga, Bettis and Sullivan 2003]. The anticipated shift in primary
product offering by business schools is schematically.
The future of the business school is a highly topical issue, as it is a growing business.
The global education and training market will continue to be growth areas. Short
courses offered by consulting companies are emerging as alternative business schools
and the research conducted by various professional service firms are becoming
alternative sources of business research. It has been stated that business schools, if
they have to survive, have to focus on research to solve problems of enduring
importance and to build such (evaluated) curricula that can actually prepare students
to be effective in practicing the profession. This is with reference to the role of
business schools. On the other hand, a recent report on financing of universities has
stated that when universities depend on taxpayers, their independence and standards
suffer (Stevens, 2004). Under- priced goods and services are usually wasted.
Flexibility in setting sources of income is necessary for inducing business schools to
compete on standards. Competition will make business schools continuously evolve
and develop relevant and result-oriented curricula and teaching tools. Such is the
scenario of global management education market.

1.2 Global Management Education Market

1.2.1 Europe:
In 1957, INSEAD became the first European university offering the MBA degree,
followed in 1964 by IESE (first two-year program in Europe), UCD Smurfit Business
School in 1964, Manchester Business School and London Business School in 1965,
The University of Dublin (Trinity College), the Rotterdam School of Management in
1966, the Cranfield School of Management in 1967 and in 1969 by the HEC School
of Management (in French, the cole des Hautes tudes Commerciales) and the
Institut d'Etudes Politiques de Paris. In 1974, AGH University of Science and
Technology in Cracow, Poland began offering a degree similar to the MBA. In 1991,
IEDC-Bled School of Management became the first school in the ex-socialist block of
the Central and Eastern to offer an MBA degree. Because of technology advances,
distance or online MBA programs have recently emerged in Europe. Several business
11

schools in the United Kingdom now offer distance MBA programs. In 2007, ESCEM
became the first French Business School to offer their own distance or online MBA.
Accreditation standards are not uniform in Europe. Some countries have legal
requirements for accreditation (e.g. most German states), in some there is a legal
requirement only for universities of a certain type (e.g. Austria), and others have no
accreditation law at all. Even where there is no legal requirement, many business
schools are accredited by independent bodies voluntarily to ensure quality standards.
1.3.2 Germany:
Germany was one of the last western countries to adopt the MBA degree. In 1998, the
Hochschulrahmengesetz (Higher Education Framework Act), a German federal law
regulating higher education including the types of degrees offered, was modified to
permit German universities to offer master's degrees. The traditional German degree
in business administration was the Diplom in Betriebswirtschaft (Diplom-Kaufmann;
Master's degree equivalent) but since 1999, bachelor's and master's degrees have
gradually replaced the traditional degrees (see Bologna process). Today most German
business schools offer the MBA. Most German states require that MBA degrees have
to be accredited by one of the six agencies officially recognized by the German
Akkreditierungsrat (accreditation council), the German counterpart to the USAmerican CHEA. The busiest of these six agencies (in respect to MBA degrees) is the
Foundation for International Business Administration Accreditation (FIBAA). All
universities themselves have to be institutionally accredited by the state (staatlich
anerkannt).
1.3.3 United Kingdom:
The UK based Association of MBAs (AMBA) was established in 1967 and is an
active advocate for MBA degrees. The Association's accreditation service is
internationally recognized for all MBA, DBA and Masters in Business and
Management (MBM) programs. AMBA also offer the only professional membership
association for MBA students and graduates. UK MBA programs typically consist of
a set number of taught courses plus a dissertation or project.

12

1.3.4 Australia:
In Australia, 42 Australian business schools offer the MBA degree. Universities
differentiate themselves by gaining international accreditation and focusing on
national and international rankings. Most MBAs are one to two years full time. There
is little use of GMAT, and instead each educational institution specifies its own
requirements, which normally entails several years of management-level work
experience as well as proven academic skills.
Ratings for Australian MBAs are carried out by the Graduate Management
Association of Australia, which publishes an annual Australian MBA Star Ratings.
1.3.5 Japan:
Being the second largest Economy in the World, Japan has many universities offering
MBA programs. The quality of universities and higher education in Japan is
internationally recognized. Many Japanese Business schools offer Full time MBA
programs, Part Time MBA programs, and E-Business Management.
Japan has about three million students enrolled in 1,200 universities and junior
colleges and is consequently the second largest higher educational system in the
developed world. Japan also has one of the largest systems of private higher education
in the world. The 710 odd universities in Japan can be separated into 3 categories:
highly competitive, mildly competitive and non-competitive (the schools that are firsttier being the most infamously difficult ones to enter).
MBA in Public universities are generally more prestigious than their private
counterparts with only 25 percent of all university-bound students being admitted to
public universities. The Public universities such as Nagoya University, University of
Tsukuba, Kyushu University, Kyoto University offer Management studies and
Business Administration and are the oldest and most prestigious universities in Japan.

1.3 Innovations in Management Education

Innovations in management came from thought leaders and consultancy firms as well
as from business schools who designed and delivered MBAs. One of the major drivers
13

of changes of management education has been the influence of thought leaders. They
brought in new concepts and new perspectives that enriched management education.
Porter introduced the diamond of competitiveness [Porter, 1980]. This helped in
conceptualizing the sources of competitiveness in firms as well as in industry.
Prahalad and Hamel [1990] brought in the concept of core competence and this has
been used widely. The third major thought leader in management has been Senge.
Senge emphasized the role of learning. It plays a major role in developing and
implementing strategy [ Senge 1990 ]. The next major contribution was emotional
intelligence [Goleman 2004]. The movement by Goleman led to rationalize feeling
and emotive or intuitive aspects in a western cognitive frame rather than a
European/Oriental existential and simultaneous frame of reference. These provide for
richer frameworks that are more integrative and provide new insights for decision
making.
There have been serious criticisms about the current management education pattern,
both in US and in Europe. Mintzberg has been one of those who argued for significant
changes. Some of the major concerns and the manner in which they are being
addressed are dealt with in this section.
Mintzberg stated in his book that MBA prepared people to manage nothing.
Synthesis, not analysis is the very essence of management. Mintzberg finds fault with
the emphasis that many MBA programs place on frenetic case studies which
encourage people to come up with rapid answers based on meager data. This has lead
to the question are business schools teaching the right things? Today, business
schools face more competition and more criticism about the quality of their work,
than they have ever done before. This is leading to fundamental changes in the
structure of the business school market and perhaps in what schools teach and how
they teach it. In the US, about 25% of all masters degrees are MBAs. Business
schools need to change their perception that the enhancements of their students
careers are measured mostly in terms of salary.
Most of the business schools have moved away from public funding. MIT and
Stanford derive their funding from endowments. Columbia, INSEAD and IMD derive
their income from executive education. Kellogg focused on customized programs,
made students a priority and preferred teamwork. Kellogg has a stable model and it
14

continuously changes its core curriculum. The current downturn has lead to a shake
out of weaker and less established providers, but in the long term, executive education
will remain a lucrative market. Good business schools are continuously innovating.
Oxford gets back its erstwhile students while at work, for interaction with faculty for
short periods. This model has been admired by many. MIT has announced a major
change in the Sloan Fellows Program by giving greater emphasis on technology,
innovation and entrepreneurship. Minimum requirement for this program is ten years
of work experience. The program will be a flexible one, with three months stay and
the remaining spread over a longer period. On the other hand, Goizueta Business
School, at Emory University in Atlanta increased the University Business
interaction through field trips and client interactions. Through this model, it has been
able to react in a very practical way to the shrunken job market. Goizueta Business
School helped the students by being more flexible in choosing where, and in what
field, they work.
INSEAD responded to the demand by pricing its Executive MBA at a lower level. It
also started a new campus at Singapore. INSEAD began as an independent school
with corporate help with strong focus on teaching. In the 1990s, it began devoting
more time to research and putting more emphasis on research when professors come
up for tenure. 65% of the revenue of INSEAD came from executive education
program with the market in both Europe and America shifting away from open
program towards custom designed ones. INSEAD is building a partnership with
Wharton and sending faculty members to American corporate sites.
The intense competition, coupled with the changing market, has forced most business
schools to look at cooperation among the schools themselves. Business school
business school partnerships, and business school industry partnerships are
increasing. MIT and BP have started a cooperation project, with MIT providing the
leadership inputs. Top business schools are specializing and customizing their
program and curricula, as well as changing the sources of their income. Many
business schools are attempting to use executive MBAs as a source of major revenue.
Different business schools have different approaches for giving a new thrust for
management education. Some more innovative approaches to management education
are discussed here. As technology, globalization and the post New Economy are
15

changing the paradigms of business, business graduates coming out today must be
critical thinkers on an international scale in order to make insightful decisions across
multiple disciplines. MBA at McGill has taken a new direction to enhance the
educational experience. It draws on strengths of the existing programs, provides a
strong international perspective, and focuses on interactive teamwork and an
integrated approach to study. The approach attempts to maximize interaction and
critical thinking in the classroom. It considers true leadership as engaging, not
heroic. According to Mintzberg: The attainment of knowledge and the enhancement
of competencies are important, but we wanted our program to go beyond these, to
help people become not just more effective managers but wiser human beings more
thoughtful, more worldly, more engaging. The thrust of MBA is called E3:
Enhancing the Educational Experience.
Leicester Business School redesigned its MBA in 2003. The uniqueness of the
program is that it links the teaching and research strengths of the Business Schools
with the business experience of participants. The MBA commences with an induction
program covering the fundamentals of management education. This leveling program
will facilitate participants from both business and non-business backgrounds to attain
equivalence in their knowledge base. The MBA will lead with core modules that
broaden and critically examine key business and management of fundamentals. The
integration of the core modules is achieved through a module called Strategy in a
complex environment. The integration is achieved by pulling together the strategic
management skills within the core modules, equipping participants with the ability to
think conceptually and holistically. One of the innovative elements of this MBA is the
flexible approach to learning that allows students to switch between the modes of
study. The MBA students have to undertake either a full-length research based on
dissertation or a shorter in-company problem that could demonstrate real life
problem-solving capabilities.

1.4 Content And Method Of Teaching

The major features that distinguish top and ordinary business schools are what they
teach and how they teach. Considerable attention is given to themes, contents and
pedagogy.
16

Although MBA rankings have forced business schools to pay closer attention to what
its students want, Kellogg is still the standardsetter. Kellogg has devoted time to
deepen its links with potential employers. Secondly, Kellogg continuously changes its
core curriculum. The new system allows students to specialize sooner, making them
more useful to employers. In the MBA they have moved up the courses on leadership
and ethics to the fore. A class on Leadership in times of crisis once optional, is now
mandatory. And there is a new core course on Business in its social Environment.
Given the striking ethical failures of some recent corporate leaders, business schools
are making a big deal of their improved offerings on leadership and ethics. Business
schools are focusing on promoting ethical leadership. Columbia aspires to discuss
ethics in every course, rather than teach ethics separately. University of Marylands
business school now takes students to visit whitecollar criminals in prison.
There has been focus on both what they teach and how they teach. Innovative designs
and innovative delivery methods are the order of the day. University of Marylands
R.H Smith School of business has been using a minimum security facility as a
training ground for its MBAs. The program involves a visit to the prison and speaking
to the executives about the ways in which deadlines and other pressures within
companies can spawn ethical lapses. The objective of a program like this is stated as:
We want executives to have a look at what can go wrong, and if and when that
happens, what that would mean and where you would end up if you fall into various
traps. To dramatize these traps, the program organizers use role playing exercises in
which participants can experience what punitive reaction to such ethical lapses is
like. The topics covered include crisis communications coaching, instruction in the
effects of corporate incentives on ethics, and social responsibility lessons.
The innovations in content delivery have been on themes that cannot be learned in a
class. Through pure instruction, Harvard Business School developed a new way of
teaching negotiations. The program is designed with a broad objective of learning to
understand the thought processes involved in negotiation, to compare rational and
intuitive decision making strategies, and to identify common mistakes made by even
the most experienced professionals. The program draws on some of the most
advanced concepts from the emerging areas of behavioral economics, behavioral
decision research and behavioral finance. Negotiating takes many forms. Auctions are
17

becoming increasingly common. Coursework on negotiations focuses on analysis of

case studies and on simulations that give participants a chance to roll up their
metaphorical sleeves and put themselves to the test. The design is to eliminate the
commonly heard complaint: I have heard some interesting things, but I couldnt
apply them once I got back to work.
Kellogg has a Dispute Resolution Research Centre that teaches managers to become
better negotiators. These are for both MBAs and for executives. Here the approach is
different. The program has a heavy emphasis on simulations, which start out as simple
one-on-one negotiations and gradually become more complex. Emotionless style of
negotiating, or one that seeks resolution through encouragement and positive
reinforcement, usually seems more effective than one that relies on threats and
bullying. Originally, negotiation was taught by the Law School at Kellogg. Kellogg
Business School now offers a program that is based on experience. The major
learning that made faculty revisit the course on negotiating skills is that negotiators
rarely get feedback, positive or negative, on their skills and end up relying on self
perception which can be unduly flattering.
Apart from ethics and negotiations the themes that used a different approach have
been leadership and interpersonal skills. Ashridge Management College has been
focusing on interpersonal skills. Ashridge mostly focuses on understanding their own
strengths and weaknesses and give suggestions on how to strengthen their skills.
Emotional intelligence approach is becoming more popular. Wharton used
mountaineering in real life to teach principles of leadership. For some of the courses
Judge Institute of Management has joined hands with MIT. Richard Ivey School of
Management considers that organizations need leaders to be able to assess situations
that are frequently complex and seldom identical to past situations. Hence leaders
must recognize patterns without assuming that a situation is identical to one they have
encountered before.
Business Schools across the world have introduced themes that can make the
managers re-examine their own frames of reference. Babson College has introduced a
course on history of management thinking that teaches managers not to think too
much of themselves. Another theme that is receiving close attention is globalization.
18

Fuqua School of Business at Duke University joined hands with business school at
Seoul National University, for exposing students to the realities of globalization.
On the whole, business schools are bringing together various bundles of experiences,
situations and contexts including cultural sensitivities to bring management education
closer to the practice of management.

1.5 History
The first graduate school of business in the United States was the Tuck School of
Business, part of Dartmouth College Founded in 1900, it was the first institution
conferring advanced degrees (masters) in the commercial sciences, specifically, a
Master of Science in Commerce degree, the forebear of the modern MBA degree.
In 1908, the Graduate School of Business Administration (GSBA) at Harvard
University was established; it offered the world's first MBA program with a faculty of
15 plus 33 regular students and 47 special students.
The University Of Chicago Booth School Of Business first offered working
professionals the Executive MBA (EMBA) program in 1940 and this type of program
is offered by most business schools today.
In 1946, Thunderbird School of Global Management was the first school to offer an
MBA program focused on global management.
In 1950, the first MBA degrees awarded outside the United States were by The
University of Western Ontario in Canada, followed in 1951 with the degree awarded
by the University of Pretoria in South Africa. The Institute of Business
Administration, Karachi in Pakistan was established in 1955 as the first Asian
business school by the Wharton School of the University of Pennsylvania. In 1957,
INSEAD became the first European business school to offer an MBA program. In
1986, the Roy E. Crummier Graduate School of Business at Rollins College (Florida)
was the first MBA program to require every student to have a laptop computer in the
classroom. Initially, professors wheeled a cart of laptops into the classroom.

19

The MBA degree has been adopted by universities worldwide, and has been adopted
and adapted by both developed and developing countries.

1.6 Basic Types of MBA Programs

Two-year (Full Time) MBA programs normally take place over two academic years
(i.e. approximately 18 months of term time). For example in the Northern Hemisphere
beginning in late August/September of year one and continuing until May of year two,
with a three to four month summer break in between years one and two. Students
enter with a reasonable amount of prior real-world work experience and take classes
during weekdays like other university students.
Accelerated MBA programs are a variation of the two year programs. They involve a
higher course load with more intense class and examination schedules. They usually
have less "down time" during the program and between semesters. For example, there
is no three to four month summer break, and between semesters there might be seven
to ten days off rather than three to five weeks vacation.
Part-time MBA programs normally hold classes on weekday evenings, after normal
working hours, or on weekends. Part-time programs normally last for three years or
more. The students in these programs typically consist of working professionals, who
take a light course load for a longer period of time until the graduation requirements
are met.
Executive MBA (EMBA) programs developed to meet the educational needs of
managers and executives, allowing students to earn an MBA or another businessrelated graduate degree in two years or less while working full time. Participants
come from every type and size of organization profit, nonprofit, government
representing a variety of industries. EMBA students typically have a higher level of
work experience, often 10 years or more, compared to other MBA students. In
response to the increasing number of EMBA programs offered, The Executive MBA
Council was formed in 1981 to advance executive education.
Distance learning MBA programs hold classes off-campus. These programs can be
offered in a number of different formats: correspondence courses by postal mail or
20

email, non-interactive broadcast video, pre-recorded video, live teleconference or

videoconference, offline or online computer courses. Many schools offer these
programs.
Dual MBA programs combine MBA degree with others (such as an MS, MA, or a
J.D., etc.) to let students cut costs (dual programs usually cost less than pursuing 2
degrees separately), save time on education and to tailor the business education
courses to their needs. Some business schools offer programs in which students can
earn both a bachelor's degree in business administration and an MBA in four or five
years.

1.8 Admissions Criteria

Most programs base admission on the Graduate Management Admission Test
(GMAT), significant work experience, academic transcripts, essays, references or
letters of recommendation and personal interviews. The Graduate Record
Examination (GRE) is also accepted by some schools in lieu of the GMAT. Some
schools are also interested in extracurricular activities, community service activities
and how the student can improve the diversity of and contribute to the student body as
a whole. All of these qualifications can be important for admission; however, some
schools do not weigh GMAT scores as heavily as other criteria. In order to achieve a
diverse class, business schools also consider the target male-female ratio and localinternational student ratios.
Depending on the program, type and length of work experience can be a critical
admissions component for many MBA programs. Many top-tier programs require five
or more years of work experience for admission.
Most top MBA programs cover similar subjects within their core required courses.
For information about the typical content of an MBA programs core curriculum.
MBA programs expose students to a variety of subjects, which students may choose
to specialize in a particular area. Students traditionally study a wide breadth of
courses in the program's first year, and then pursue a specialized curriculum in the
second year. Full-time students typically seek an internship during the interim.
Typical specializations include: accounting, economics, entrepreneurship, finance,
21

international business, management science, marketing, operations management,

organizational behavior, project management, real estate, and strategy, among others.
In India most of the reputed universities admit students on the basis of another
entrance examination -CAT.

1.9 Evolution of Management Education in India

Management Education in India has not grown in an evolutionary manner. American
experience was grafted on to an existing educational system and did not emerge from
the native educational and business context and culture. Its development has been
random and its objectives, content, pedagogy and other aspects need re-examination
in relation to the needs of India, in an increasingly globalizing economy.
Organizations are becoming more complex and businesses more competitive. The
demands on the skills of Indian managers are changing. It has become essential to reexamine the entire structure, content, purpose and pattern of Management Education.

1.10 Management Education in India: Some Emerging Issues

Excellence in any economic segment needs excellent managers who are capable of
conceptualizing ideas, converting them into products and services, satisfying
customer needs, enabling seamless working and continuously maintaining the
competitiveness. India continues to lag in its ranking on competitiveness. If India has
to become a global economic power, it has to give attention to management education
as coordination of assets, supply chain and knowledge flows will become critical for
maintaining the competitive edge. Before examining the issues, a review of steps
proposed by various committees for improving management education are examined.
This is followed by a section that highlights the emerging issues in management
education in India.
1.10.1 Management Education: Some Systemic Issues
A number of committees have looked into management education in India in the past.
This section attempts to identify the systemic issues faced by management education
as identified by the earlier committees. Most of the problems identified by the
committees continue to be there as no major corrective measures have been initiated,
hence a revisit of the critical suggestions.
22

1.10.1.1 The Nanda Committee

Nanda Committee was the first committee that reviewed the working of the three
Management Institutes of Management at Ahmedabad, Kolkata and Bangalore, to
make recommendations for the promotion and development of management education
in India. The Nanda Committee suggested a series of measures in 1981 for
strengthening management education in India, viz.:
Adequate funding for research to be provided without soliciting project
funding. Consultancy research should cover both basic and applied types.
IIMs should act as mother institutes and foster growth of other management
Institutions in the country.
There is urgent necessity to develop expertise in international management
and offering of educational and training program in international management.
Government control should be progressively reduced as each institute
becomes more and more self-reliant.
Management education has to be research based, and utility based, the institutes
should become self reliant and the government must relinquish control over the years.
1.10.1.2 The Kurien Committee
Government of India appointed a second review committee under the Chairmanship
of Mr V Kurien in 1991, to look into the direction and functioning of the four
institutes of management. The committee submitted its report in 1992. The salient
recommendations were:
The mission of the Institutes of Management to strengthen management in
business, industry and commerce is still relevant. The mission statement
however, needs to be expanded to emphasize the IIMs commitment to public
service and public management.
The inter-relatedness of teaching, research and consultancy needs to be better
emphasized for greater synergy. Choices in approving research and
consultancy must be exercised to strengthen their interconnectedness and
mutuality.
23

 There should be a much greater emphasis on the development of relevant

teaching materials and research. Appropriate policies and rewards should be
initiated to strengthen this aspect of IIMs functioning.
The Government should take a flexible view in providing financial support to
the different IIMs and encourage the institutes to vigorously pursue revenue
generation, cost cutting, and fund raising efforts. The non plan maintenance
grants may be provided as Block Grant for a period of five years.
After the institutes have become financially self supporting with the creation
of the corpus fund and the package of measures for augmenting its internal
resources and cutting down cost, the government grants may be limited to
program considered high priority and of social relevance by government
including the area of public system management.
IIMs reoriented their operations subsequent to this report. They revised the fee
structure and started raising resources through industrial consulting. This helped the
IIMs to become financially self-sufficient.
1.10.1.3 The Ishwar Dayal Committee
Many management institutes came up between the years 1995 and 2000. Government
of India appointed another committee to develop future perspectives of management
education in the light of the fast changing economic, social and business environment.
The main challenge in management education has been triggered by globalization of
economies, rise of market economy, rapidly changing technology and developments
in communication. During 1950-1980, about 118 management institutions came up
and during the 1985-2000 periods 673 new institutions came up.
Most institutions that were set up during the 90s did not follow conditions
prescribed by AICTE in respect of faculty strength, library, computer facilities
and the like.
They did not promote research, development of faculty or of the teaching
material.
Due to rapid expansion of teaching institutions, AICTE was unable to develop
an adequate mechanism for enforcing standards.
24

 The teaching methodology shows inadequate concern for applying cumulative

knowledge in dealing with managerial problems.
Among all the action areas, faculty development was considered the most critical. It
was proposed that 8 to 10 institutions should focus on this. Though the Committee
gave its report in 2001, there were no major initiatives from AICTE for faculty
development or development of teaching materials so far.
Subsequent to this, a committee was constituted by AICTE to review management
education in India.
1.10.2 The Management Education Review Committee
AICTE appointed a committee in 2003 to come up with a policy and action plan for
the development of management education in India, in the context of our current
national requirements and national trends.
This committee suggested the following steps for strengthening management
education, viz.:
Increase the focus on under managed sectors such as cooperatives, forestry,
urban management, infrastructure, rural development, education and legal
systems.
The admission of students in management schools should be only through
recognized tests organized on an all India basis and used for short listing
candidates for group discussions and interviews. The number of admission
tests could be progressively reduced, say to two or three tests.
Accreditation is one of the major means of assuring quality. Only 15 PGDM
program and 30 MBA program out of the 927 MBA/PGDBM program
approved by the AICTE have been accredited.
In spite of having some excellent institutions, research output, by and large, of
even the more prestigious institutions has not been adequate. This needs to be
rectified. Over the next decade, research has to get its rightful place in the
activities of management schools. While the accreditation process will help in
improving the quality of teaching and training, it is imperative that research
25

also figures prominently as a major element in the portfolio of activities of

accredited institutes.
In order to have a better global exposure, to suit the requirements of industry
under globalization there is a pressing need for globalization of management
education.
Another element which is important for globalization would be to keep our
country open to the presence of foreign business schools and universities. It is
necessary for Indian Institutions to work out strategies to go abroad, and
allowing foreign universities to come to India, without too many obstacles.
That there is a severe shortage of faculty in the entire technical education
system is well recognized. In management education, the problem is more
acute.
All the four committees have unequivocally indicated that management education in
India faces the following systemic problems:
Shortage of faculty and quality of faculty are the most critical aspects that
need to remedied soon.
Most of the management institutions have been neglecting research.
There has been very little attention provided for preparing course materials
specific to the Indian context.
Library and computer infrastructure has been poor, except in the top
management institutes.
Management institutions did not develop interactions with industry and this
acted as a vicious circle giving merely non- practical education.
Management institutions invested very little for faculty development even
though most of the committees earlier had identified this as a major lacuna.
These recommendations broadly indicated the lacunae in management education in
India. Before a management development roadmap can be prepared some of the
issues that management education is facing are delineated.
26

1.11 Official Accreditation

AICTE is the formal body that gives recognition to management institutions except
that under universities. In India, recognition is given to institutions as a whole and not
for specific courses. In other countries, accreditation is used most as a quality tool and
is done for courses independently. Again, the recognition in India is based on
facilities, faculty and infrastructure. Research and industry interaction do not find a
place in recognition. The recognition is not sufficient to ensure that the quality norms
are met with. India needs a professional body that provides accreditation to
management institutes. The management schools could be classified under four
distinct classes:

Research based Schools;

Specialized Schools;

General MBA Schools;

Practice Oriented and Industry linked.

1.11.1 Background of AICTE

All India Council for Technical Education (AICTE) was set-up in November 1945 as
a national level Apex Advisory Body to conduct survey on the facilities on technical
education and to promote development in the country in a coordinated and integrated
manner. And to ensure the same, as stipulated in, the National Policy of Education
(1986), AICTE be vested with statutory authority for planning, formulation and
maintenance of norms and standards, quality assurance through accreditation, funding
in priority areas, monitoring and evaluation, maintaining parity of certification and
awards and ensuring coordinated and integrated development and management of
technical education in the country.
The Government of India (Ministry of Human Resource Development) also
constituted a National Working Group to look into the role of AICTE in the context of
proliferation of technical institutions, maintenance of standards and other related
matters. The Working Group recommended that AICTE be vested with the necessary
statutory authority for making it more effective, which would consequently require
restructuring and strengthening with necessary infrastructure and operating
mechanisms.
27

Pursuant to the above recommendations of the National Working Group, the AICTE
Bill was introduced in both the Houses of Parliament and passed as the AICTE Act
No. 52 of 1987. The Act came into force w.e.f. March 28, 1988. The statutory All
India Council for Technical Education was established on May 12, 1988 with a
view to proper planning and coordinated development of technical education system
throughout the country, the promotion of qualitative improvement of such education
in relation to planned quantitative growth and the regulation and proper maintenance
of norms and standards in the technical education system and for matters connected
therewith.
The purview of AICTE (the Council) covers programmes of technical education
including training and research in Engineering, Technology, Architecture, Town
Planning, Management, Pharmacy, Applied Arts and Crafts, Hotel Management and
Catering Technology etc. at different levels.
1.11.2 The Organization
In accordance with the provisions of the AICTE Act (1987), for the first five years
after its inception in 1988, the Minister for Human Resource Development,
Government of India was the Chairman of the Council. The first full time Chairman
was appointed on July 2, 1993 and the Council was re-constituted in March 1994 with
a term of three years. The Executive Committee was re-constituted on July 7, 1994
and All India Boards of Studies and Advisory Boards were constituted in 1994-95.
Regional Offices of the Ministry of Human Resource Development, Government of
India, located at Kolkata, Chennai, Kanpur and Mumbai were transferred to AICTE
and the staff working at these offices were also deputed to the Council on foreign
service terms w.e.f. October 1, 1995. These offices functioned as secretariats of
Regional Committees in the four regions (East, South, North and West). Three new
Regional Committees in southwest, central and northwest regions with their
secretariats located at Bangalore, Bhopal and Chandigarh respectively were also
established on July 27, 1994.
The AICTE has its Headquarters in New Delhi which has the offices of the Chairman,
Vice-Chairman and the Member Secretary and is presently housed in a building
having a covered area of 38542 sq. ft. located in Indira Gandhi Sports Complex,
Indraprastha Estate, New Delhi. The present building is taken on lease from the
28

Sports Authority of India. The Government of India has allocated 5 acres land in the
campus of Jawaharlal Nehru University, New Delhi, for constructing the
administrative and other buildings of the Council.
The AICTE comprises of nine Bureaus, namely:
Faculty Development (FD) Bureau
Undergraduate Education (UG) Bureau
Postgraduate Education and Research (PGER) Bureau
Quality Assurance (QA) Bureau
Planning and Co-ordination (PC) Bureau
Research and Institutional Development (RID) Bureau
Administration (Admin) Bureau
Finance (Fin) Bureau
Academic (Acad.) Bureau
For each Bureau, Adviser is the Bureau Head who is assisted by technical officers and
other supporting staff. The multidiscipline technical officer and staff of the Council
are on deputation or on contract from various Government Departments, University
Grants Commission, academic institutions etc.
1.12 AIMA
The All India Management Association (AIMA) was created as an apex body of
professional management with active support of the Government of India and
Industry in 1957. AIMA is a group- a body to pool management thoughts in the
country, a forum to develop a national managerial ethos, an orgnisation to facilitate
the furtherance of the management profession in the country. AIMA is a federation of
Local Management Associations (LMAs). AIMA today affiliates 58 LMAs across the
country and two Co-operating management associations i.e. Qatar Indian
Management Association and Mauritius Management Association.AIMA has
established close linkages with over 3000 institutions and over 30,000 individual
29

professionals directly and through network of the Local Management Associations.

AIMAs

activities

include

Distance

management

Education,

management

Development Programmes, national Events, Competitions, Research, Publication and

Testing Services. AIMA is represented on a number of policy making bodies of the
Government of India and a number of National bodies / organizations. Some
important ones are as under:All India Council for Technical Education (AICTE), which is the apex regulatory
body for professional education in the country under the Ministry of Human Resource
Development (HRD), Government of India

Council of Institute of Applied Manpower Research

Boards of Governors, Indian Institutes of Management (Ahmedabad,

Bangalore, Calcutta, Indore and Kozikode)

Bureau of Indian Standards, New Delhi

National Productivity Council, New Delhi Central Direct Taxes Advisory

Committee

AIMA is frequently co-opted by the Government on Specialised

Committees.

AIMA is an active member of the Asian Association of Management Organizations

(AAMO), which is the Asia-Pacific regional body of the World Management Council
(CIOS).
AIMA maintains close links with a number of overseas professional institutions like
the American Management Association, Chartered Institute of Management (UK), all
the National Management Organisations in the Asia Pacific Region and St Gallen
University of Switzerland among others. AIMA could play a major role in the
accreditation process as it is the apex professional body for management. It is active
in management education and represents a large number of stakeholders. Probably for
Indian Business Schools, a multi-parameter benchmarking could be used. We cannot
use the American and European accreditation process directly, it needs to be modified
and adapted to our specific context. Accreditation will improve transparency in the
ranking process. In Europe/America, accreditation is done at the Programme level.
For example, Accountancy Programmes are accredited. In India, we have to start with
30

a school wise approach first. Accreditation could facilitate both specialization and
research focus. The accreditation should include assessing the mission of the schools
and its own strategic plan for upgrading the curricula and developing the teachers.
Though recognition is predominantly a government function, accreditation has to be
linked to the richness of the offering and the process orientation of the business
schools, and that can best be performed by a professional body. Accreditation has to
be a continuous process and it has to lead to continuous improvement in quality.
These changes could help in bringing a certain degree of competition among the
business schools. The prerequisite for changing management education is a consensus
based approach to accreditation in association with major stakeholders. One of the
major changes taking place in management education is increased customization of
programmes. Accreditation has to consider the extent of customization of
programmes. In the Indian context, if accreditation has to lead to real improvement in
management practices in real life, it has to encompass commerce education since it
has a much broader base, and a larger coverage.

1.13 Business School Ratings

There are about 1400 b-schools in India, most of which are private entrepreneurial
ventures. It includes university departments, government funded (like the IIMs) or
heavily supported by business houses. About 80 to 100 b-schools are added to this
pool every year .With that the competition also heats up gradually and so does the
importance of branding. No wonder the (private) education industry has emerged as
one of the biggest ad-spender .The campaigns between June and October every year
turnout to be the biggest attractions for media, and hence the special issues. In this
brand-building exercise all sorts of exaggerated claims are advanced, naturally to
attract as many applicants as possible. The media-supported b-school ratings serve as
an important platform for branding exercise. For many poorly rated b-schools, the ads
work as a neutralizing agents. As the number of b-schools goes up, so does the
confusion for the average MBA aspirant .The students, therefore, are becoming more
discerning as the time passes by. They seek more and better information on bschools in order to short-list their choice of destination. Almost all b-schools have
information on their websites but it is, at times, not considered reliable. Thus the
rating/ranking of b-schools has gained importance over time. For media this increases
31

the circulation of the special issues containing ratings but also fetches them huge ad
revenues.
After AICTE was set up, approvals were granted to a variety of institutions to run
post graduate programs. Due to the time pressure the process adopted by AICTE was
not fool proof. As a result some of the approved institutions did not even have bare
minimum facilities such as faculty, library, building, computers etc. The need to have
a proper accreditation process was badly felt at that time. AIMAs attempt to
implement an objective accreditation mechanism did not bear fruit. Many b-Schools
with little or no capability had received accreditation from AICTEs National Board
of Accreditation. Although AICTE had a well defined accreditation process on paper.
But when it came to implementation, questions were raised. As a result AICTE drew
flak from experts in management education all over the country. The need to have
some objective and impartial B-School rating was felt at this stage.
This opportunity was seized by Prof Dharani Sinha, whose consulting firm
COSMODE was pioneer in launching the b-school ratings in 1998, with Business
Today as the media partner. After COSMODE did the first ranking with Business
Today magazine, other ranking agencies/ and publications also jumped the
bandwagon in course of time.

1.14 Global B-School Ratings

Cosmode-BT1998 rating

may be the pioneering effort in India to grade/rank b-

schools, but globally such exercises have been undertaken for decades. The first ever
b-school ranking was done by Columbia University in the US in 1972.This was more
of an academic standard evaluation. This pioneering effort used two different types of
data. Factual information on research /publications by the faculty members of the bschool under scanner and Perception-based evaluation by the Deans about b-Schools.
Columbias ratings were followed next year by yet another university -Georgia State
University, albeit with a modified criteria. GSU added two new factors -the
curriculum of the b-school and more importantly the employability of its graduates.
We have not seen so far any academic institution taking up the cudgels to undertake a
rating exercise as happened in US. Media dominance of evaluation /ranking in India is
also based on international pattern. Even in the US the b-school ratings was taken
32

over by the media. Prominent among them are: Business Week (BW), Financial
Times, U.S. News & World Report, the Wall Street Journal Since 1986, BW had
conducted surveys, every two years, of graduating MBA students and recruiters to
create a customer satisfaction scorecard. US News and World Report launched its Bschool ranking exercise in 1990, Asia Inc in 1995, Financial Times in 1999, Forbes in
2000, and Wall Street Journal in 2001. The methodology used, parameters and the
weights allocated in these surveys are different. The ratings therefore are drastically
different from each other.

33

Table 1.1 International B School Surveys by Media

Media

Started

Frequency Weightage & Ranking Criteria

Business

1986

Every

2 45% students survey, with different parameters

years

45% recruiters survey with different parameters

Week

10% faculty publications

U.S. News & 1990

Annual

World Report

40% DeansSurvey
35% Graduates Employability / starting salaries,.
25%Studentsacademic quality ( GMAT Scores included)

Asia Inc

1995

Annual

20% Peer-Reputation Ranking (by Deans)

45% School & Faculty Quality
35% Students academic quality

Financial

1999

Annual

Times

20% Graduating Students starting salary

20% 3-year growth in salary post MBA
10% faculty research/ publications
10% international faculty & students
5% Ph.D. students placement
5% faculty with doctorate
5% women faculty and students
25% other criteria related to admission, curriculum etc

Forbes

2001

Every

2 Surveys alumni; Measures return on investment in

years

dollars and cents by focusing on salary and gains in

comparison to tuition costs

34

1.15 Management Education: Some Emerging Issues

Though there have been a number of committees that suggested improvements in

management education, there have been no significant changes in management
education except in the top ranking B-Schools. This section examines the major issues
that need to the addressed if management education has to improve in India, so that
managers could respond to the challenges of global competition.

Implementing Changes in Management Education

There are too many agencies dealing with management education. Management
education must be the concern of the body created by law for governing management
education The All India Council for Technical Education and its subsidiary The
Board of Management studies. Combining the governance of technical and
management education under one body was a mistake. A National Task Force on
Management Education should be appointed. The Task Force needs to address the
following issues as stated in an article by Mr. R. Gopalakrishnan, current President,
and All India Management Association.
Identify the steps that can be taken to extend management education to domains
such as cooperatives, hospitals, NGOs, public governance etc.
Create greater awareness and sensitivity through extension of the management
curriculum to agricultural marketing and rural economy as two-thirds of our
population lives there, and the gap between the per capita incomes of the agrisector
compared to the non-agrisector has been widening since Independence.
Identify the measures needed for upgrading the quality of faculty and research, as
most of the committees have pinpointed the inadequacies.
To explore ways in which the interaction between academia and management could
be improved.
Consider ways in which standards of several mediocre and in different institutions
of management are enhanced, possibly through an accreditation approach, as
management is an experience based theme.

35

 Look into the possibility of formation of All India Council of Management

Education quite independent of AICTE.
The purpose of the Task Force is to create an enabling institutional mechanism that
will give a new thrust to management education. This will ensure that there is an
independent institutional mechanism to specifically deal with management education
and also give a new thrust for management education.

Ensuring Quality Faculty

The establishment of AICTE resulted in the sanctioning of a large number of BSchools. While giving sanctions to a large number of institutions, AICTE was unable
to create adequate machinery for the development and training of faculty to teach in
management courses with an applied bias. As AICTE was unable to monitor the
quality standards in the institutions, they stipulated in 1997 that from that year
onwards, institutions would have to seek affiliation from a recognized university
before they are given sanction to start a program of study. The new requirement
concerning university affiliation, the inadequacy of the monitoring systems and the
shortage of faculty for teaching management resulted in the following conditions:
Institutions engaged part-time faculty of individuals on contract who taught a
course and in most cases, had little involvement either with the institution or the
students
New faculty members without any experience joined institutions on low salaries
and carried a heavy teaching load. They had neither time nor the necessary
background to take up research or development of teaching material. They gave
lectures mainly drawn from textbook or materials from textbooks or materials based
on their company experience.
Except for the 10 % or so institutions which updated their programs and teaching
technology, the quality of management remained substandard in the sense that they
paid inadequate attention to application of knowledge, self awareness among students
and development of problem solving, and decision making skills.
The two critical issues to be addressed are mechanisms for ensuring quality of faculty
and making the learning student-centered. This requires faculty experienced in student
36

centered learning and adequate library and computer support. The issue is to change
the bottom rung of 70 % of the institutions that are located away from metros/cities.

Developing Material Relevant to the Indian Context

There is an increasing awareness that many of the ideas and concepts that have been
effective in the countries of their origin have been less effective in India. While many
industrialized countries have tested and adopted management practices that are in
perfect harmony with their culture and tradition, India is yet to do this exercise
through systematic research and study. For example, we do not have good cases or
teaching material on managing ITES. The materials available are not specific or
relevant to our context. There are no easy approaches for solving the issue of
inadequacy of context specific material, but to develop an agenda for that, as
developing material is a specialized and time consuming task.

Promoting a Research Culture

The management institutions do not have a culture that is supportive of research. This
problem existed even in (low ranked) B-Schools in US. Imbibing a research culture
requires faculty with interest in research and a good library support system. A
research culture needs a research community and a research agenda. Such a culture
will be created only when it becomes an organizational priority and there is top
commitment for building that. If the targets of B-Schools are predominantly
monetary, a research culture will not emerge. It was been proposed that the enhanced
support for research can be brought about in three ways, viz.:
Certain themes that need special study in the next 5/7 years should be funded, and
scholars should be invited to undertake research in those areas.
Research granting procedure should be seriously reviewed to support individual
project proposals and
Encouraging institutions that have adequate support systems to start Ph.D.
programs.
The issue is how to make B-Schools create and support a research culture.

37

 Evolving An Accreditation System

As indicated in the earlier paper on accreditation, one of the emerging issues is to
identify the process to be adopted for implementation of an accreditation system.
Accreditation needs to be separated from recognition. The accreditation has to be fair,
transparent, independent as well as ruthless. The accreditation process (indicated in
the previous section) that is used by EFMD has been reported to be a widely accepted
one. As accreditation process tends to become a political one, the issue is to evolve a
method to insulate it from the political interference. Accreditation that uses
benchmarks of various parameters could reduce subjectivity. The rapid growth in the
number of management institutes requires a specialized body rather than the all
encompassing AICTE to carry out accreditation. A council exclusively for
management education is needed, and the process of accreditation and recognition
needs to be made separate. The accreditation process has to cover commerce
education as well. In most other countries, management education covers this as well.
This will ensure that management education has a broad base in India. All the degrees
covering management commerce and accountancy should be under one agency.

Corporate Governance for B-Schools

As indicated by S. L. Rao in his paper a major weakness is lack of a corporate
governance system in B-Schools. . This issue needs careful consideration. Though the
primary responsibility for upgrading and maintaining the quality of education must
rest with the concerned institution, in the absence of a proper corporate governance
system, this has not been so. There is a need to induct independent directors as well as
to implement independent audit committees for managing the B-Schools. Nothing has
been done so far in this direction. The B-Schools should become process driven.
Corporate governance has to be made an element of accreditation. Faculty
development as well as faculty involvement in the administration needs to be a part of
the corporate governance agenda. Transparency has to be the root of corporate
governance. Information on faculty qualifications, the size and contents of the
libraries, availability of computer facilities, adequate provisions for scholarships,
reach out programs to take management education to deprived sections of the
population, a rating for all institutions that guides students and recruiters in making
sensible choices, have to become a part of the corporate governance agenda in B38

Schools. The issue is how to make B-Schools implement such an agenda. This may
require a strong monitoring system and statutory reporting on the lines of SEBI, for
corporate governance in listed companies.

Student Testing Service

This again is crucial as testing becomes the basis of input quality in management
education. Many institutions have their own admission tests for which they usually
charge fairly high fees. The issue is to ensure that admission and testing need to be
segregated, as in the case of US. Evolving a national testing service and evolving a
comprehensive testing system have to examine comprehensively. There seems to be
no need to have so many tests and the proposed All India Council of Management
Education would need to examine the possibility of reduction in the number of tests
while at the same time ensuring that the quality of testing is not sacrificed for the sake
of uniformity.

Developing Interaction with the Industry

Except in the case of the top ranked B-Schools, there are no mechanisms to forge
close relationship between B-Schools and industry groups. Development of industry
interaction is an evolutionary process. The main strength of top class B-Schools like
Kellogg, Wharton, Sloan and Harvard is their strong relationship with industry
through teaching, research, student placements, problem solving and case study
preparation. As indicated in the first section of this paper top level B-schools
continuously interact with major corporations. The recent example of BP setting up
their learning centre adjacent to MIT, Cambridge shows that as competition increases,
industryB-School cooperation will go up. The issue in India is to make this happen
in the case of the low ranked B-Schools in India. There has to be an institutional
mechanism for developing liaison with industry in each B-School.

Bringing in Specialization
There are some business contexts specific to India. The issue to be examined is how
one could bring in an element of specialization so as to enhance the relevance of
management

education.

For

example,

agricultural

services,

infrastructure

management, contract research, high tech entrepreneurship, hospital management,

39

NGO and ITES are rapidly growing areas in business. These businesses need
customized management education. Curricula customization, specific material
development and faculty specialization are some of the neglected factors that led to
poor quality management education in India. Though some B-Schools have
introduced MBAs focused on telecom, financial services and infrastructure
management, there have been very little efforts on customization. On the other hand,
materials prepared for other contexts are being directly used without examining the
contextual validity.

Broadening the Perspective

One of the major concerns that have been expressed widely about B-Schools has been
that the people coming out have a very narrow perspective. Management education
and more specifically the MBA has little if any discernible positive effect upon career
success or managerial performance. Management is a value laden field. The group of
critical management thinkers are of the view that management needs have to be taught
in ways that explicitly acknowledge the political, ethical and philosophical nature of
management practice. Management education does not make better managers. This is
not because of deficiencies in management education, but due to the nature of
management as a value laden activity. Reconstruction of management education has
to recognize that managers need to attend to interpersonal relations, communication,
conflicts, feelings, politics and the like. This brings us to the issue that there is a need
for managers to connect to a wider set of public duties than that of corporate
performance through a liberal education. Gray of Judge Institute of Management,
Cambridge University has shown that management education has to facilitate the
broadening of perspectives. Linstone has been one of the management thinkers who
showed that management is all about grappling with multiple perspectives. Technical,
organizational and personal perspectives on any issue could differ considerably. The
issue is how one can inculcate multiple perspectives thinking in management
education.

Learning Real Business Issues

One of the issues that management education has to consider is the manner in which
experiential learning elements could be enhanced. This could also enhance the context
40

specificity while learning. Given the considerable contextual and institutional

varieties of management education not just between different countries but within
them, learning has to be experiential. Real life situations are complex. Bringing in a
living experience is a more promising vehicle for the introduction of messy, irrational
complexity which is arguably closer to management realities. The challenge of
management education is to bring students close to real situations. There are no easy
solutions as there are many unknowns in real life situations and many events unfold in
an evolutionary manner as decisions are made. In the recent past, a series of studies
known as Critical Management Education have emerged. Critical Management
Education is that body of education practice arising from a research tradition known
as Critical Management Studies. This school considers that management education
has been typically, although not exclusively, informed by the interest of corporations
and of managers rather than by those of stakeholders in organizations and wider
society. Facts are always impregnated with values and there is no real distinction
between morally and politically neutral means such as management has traditionally
concurred to be and the value laden ends. The issue is to ensure that management
education makes people capable of handling real life situations and at the same time
make them understand the value frame they use for solving problems and dealing with
real life situations.

Inculcating Values
Pfeffer and Fong of Stanford Graduate School of Business have brought out some
lessons from the US experience on business schools. B-Schools in U.S. face a number
of problems, many of them as a result of offering a value proposition that primarily
emphasizes the career enhancing, salary increasing aspects of business education as
contrasted with the idea of organizational management as a profession to be pursued
out of a sense of intrinsic interest or even service. These arise from a combination of a
market like orientation to education coupled with an absence of a professional
ethos. The issue in India is to make B-Schools create greater impact by focusing on
values and ethics as the guiding principles.

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 Creating a Global Mindset

London Business School recently published a study that identified the knowledge,
skills and attributes young leaders need in order to succeed. The competition is
nothing but a race for mastering knowledge and skills. If Indian industry has to
compete globally we need executives with world class talent. The issue is how to
inculcate a global mindset, though managers may act only locally. Andrews and
Tyson recently published a study that identified, the elements of knowledge, skills and
attributes that young leaders need to succeed. These are based on a survey of
executives from 20 countries. The survey brought out some issues viz.:
Executives have to move from the cheap seat to the front row of business
leadership, and business schools must develop a new approach to teaching and
learning. How can business schools carry this out rapidly?
Business schools have traditionally provided a reflective learning space, a place to
absorb information and knowledge. How can they be made to imbibe an agenda that
is practical and action oriented?
Globalization is an art an art of human relations that, like other arts, is presented
through insights gleaned from teaching and from experience, and honed by continual
practice, day in day out, in the executive suites of the worlds corporations. The issue
is to create executives with management and leadership capabilities on a worldwide
scale. The study shows that there has
been a shift in companies recruiting and development emphasis from knowledge to
skills and attributes. This means that each business school must pick the place it
intends to compete, creating a differentiated mix of teaching and training
opportunities drawn from the three sets of meta attributes that companies require of
their executives.
st

1.14 Management Education in the 21 Century:

Institutions today aim to achieve their goals by offering and exchanging values with
various markets and publics. It involves the institution in studying the target markets
needs, designing appropriate programs and services and using effective pricing,
communication and distribution to inform and serve the market.
42

Marketing of education has been well established as a global phenomenon. The

modern day system of higher education is marketed with many new features and
ideas. The salient features of education in the new-age are: an open and flexible
system, direct and easy access to every learner, a broad based and futuristic visionary
stream of learning, edutainment and infotainment and centered learning i.e. more
emphasis on insight and knowledge than mere information collection, new knowledge
with a personal touch and need and utility oriented learning.
The universities in the third world countries today are on the threshold of a new era.
Population explosion, rapid advancement and expansion of new areas of knowledge,
increased reliance on aid in solution of social and scientific problems have all
contributed to the reshaping of the responsibilities and goals of the universities and
schools imparting management education.
Management education being an integral part of higher education is also on the verge
of transformation. The present educational system, no doubt, is a great advancement
in many of the ancient areas. However, there is a feeling that, it is based on an
insufficient knowledge of human psychology and human personality. It is worthwhile
examining the demands in the present system of higher education from two angles:
the existing status and the future changes which besides other changes highlights
innovative thinking and liberalized learning. (Annexure 1)
The eminent educationalist and academician P. Khandawala (cited by Adhav and
Joshi, 2002), has rightly envisaged the future of education in India in the coming
decades, Only the learning organization can cater to todays dramatic demands
quickly. Not only will the global markets reward learning, but they will severely
punish the lack of it. The first step to overcome the shortfalls in the Indian education
system is to know whether its customer is satisfied and if not how cans this be
achieved?

1.15 The Indian Scenario:

Postgraduate education in management in India is currently enjoying a higher demand
than ever before, for several reasons:
A large number of graduates are coming out of colleges and institutes every year,
making every job opportunity highly competitive and difficult to get. With job
opportunities not being expanded in similar proportion, the majority of these
graduates turn towards postgraduate education.
43

 Many multinational companies attracted by India's "open door policy, adopted due
to economic liberalization and globalization, have recently set up their branches and
offices in India. These companies, during campus placement and recruitment, have
shown a preference for candidates with postgraduate management degrees.
Several companies have raised the entry-level qualification itself to post-graduation
with specialization in management. This is being done to ensure availability of
candidates with better skills and knowledge and also to filter out the large number of
applications they receive for every job that they advertise for.
Many students feel that a postgraduate qualification, particularly in management,
will provide them with special skills like good communication abilities, ability to
work in teams, leadership quality and exposure to current trends in business and
commerce, thus enhancing their employability.

Table 1.2 Factors Influencing the Quality of Management Education

System.
Sr. No
a) Institutional Factors
1
2
3
4
5
b) Personal Factors
1
2
3
4
5
6
c) Customer Factors
1
2
3
4
5
6

Factors
Goodwill of the institute
Quality Admissions
Good Placements of the students
Research & Consultancy
Healthy Academic Environment
Promotions & Rise in Payscales
Personal Knowledge Enhancement
Recognition in the society & industry
Research & Post Doctoral Studies
Better Job Opportunities
Self Satisfaction
Strong Knowledge Base
Practical Orientation
Experiential Learning
Personality Development
Career Guidance & Counseling
Higher Jobs & Pay scales

44

1.16 Need and Objectives of study

Need of study arises due to the changing trends in management education. And the
numbers of Business schools have been mushrooming. Many research agencies do
surveys of top B schools, taking different parameters in consideration. So in this we
will study the overall factors affecting B schools and then compare the B schools
performance and their rankings by different Research agencies. The main focus of the
study is to study the existing management education in India
Objectives of Study:
1. To study the existing management education system in India.
2. To analyze the opinion of the selected interest groups regarding existing
management education system, i.e. students, faculty and HR executives.
3. To compare the performance of selected B schools in India.
Chapterisation of The Thesis:
In the introduction chapter of the dissertation, global and Indian scenario of the
management education system is discussed. Various committees that have been
formed over the period of time to bring out reforms in the management education
system have also been discussed. Along with this certain key issues facing the
management education system are also discussed in length. Next in the review of
literature, various research papers and journals were studied to understand the
management education system in general. Thereafter in chapter three, a detailed
research methodology to carry out the research is discussed. Later in chapter four and
five a comprehensive detail about the analysis of objectives is discussed thereby
satisfying all the objectives of the study. In the latter part of the report, findings and
suggestions are mentioned.

45